A congressman returns to the exchanges

Democratic Congressman Jim McDermott of Seattle has written a defense of the health care reform act of 2010 for the Orange County Register, a daily newspaper in southern California. One of McDermott's several points - perhaps his strongest - is that before the passage of the law, small businesses faced a difficult choice, because of their smaller numbers of employee policy-holders. The choice they faced was between paying higher rates than their competitors or not providing workers with health insurance at all.

Here, McDermott is detailing a very real problem. Matching the offers of larger employers who provide health insurance to employees places them at a disadvantage since they bear higher rates and thus greater expenses. But forcing employees to pay for health insurance out of pocket depletes their financial security and consumer spending - the same consumer spending the economy depends on. The health care reform plan attempts to address this, McDermott argues, by both offering small businesses tax relief, and creating regional exchanges where the workforces of small businesses can be pooled for insurance.

These exchanges, to be established by the states, are not necessarily government-run insurance, according to the Christian Science Monitor. The states will create the exchanges by 2014, and they may be administered by independent, non-profit boards, likely trading plans and policies offered by private firms. Not that it would matter if the insurance was government-run; most of the reconstruction work in Iraq was insured by the government-backed Overseas Production Investment Corp., as detailed by The Nation's Naomi Klein, and generations of Americans have had their bank deposits insured by the government-backed Federal Deposit Insurance Corp.